A Hill source sent me this e-mail from the Bush administration outlining the giveaway, which provides for a new cash injection to the federal TV converter box fund. Yes, there is such a thing. The fund ran out of money last month:

The Department of Commerce is working closely with Congressional authorizers to find solutions to allow TV converter box coupons to resume processing and distribution of coupons without further delay.

The attached language would enable NTIA to resume timely processing and distribution of TV converter box coupons by increasing NTIA’s budget authority by $250 million. Under the Administration’s proposal, NTIA would recapture an estimated equivalent amount from de-obligated funds realized after March 31, 2009, based on an assumption of 65 percent redemption of coupons going forward. The intended effect of this Proposal would be total Coupon Program outlays not exceeding the approximately $1.5 billion funding limit established under the Digital Television Transition and Public Safety Act of 2005.

We welcome the opportunity to work with you on this matter, and to move expeditiously on resolving this problem. Please feel free to contact me or Jim Wasilewski, NTIA’s Director of Congressional Affairs at 202.482.1551, if you have any questions.

It’s the season for bailouts and the digital television switch program is the latest to ask for a little help.

Broadcasters are set to switch to digital transmission starting Feb. 17 but many consumers could be left out in the cold as funding for converter box coupons that can make analog TV sets digital-ready could fall short.

“The expected surge in consumer demand for converter box coupons is occurring and the fact that NTIA now projects it will have to delay or possibly deny the issuance of converter box coupons to consumers without additional funding is of great concern,” says Congressman Ed Markey in a statement.

Congress may need to “quickly” pass additional funding for the converter box program in early January, says Markey.

That means up to $330 million more in funding to sustain the converter box coupon program, estimates the National Telecommunications and Information Administration.

The coupon program has already been an expensive one. About $1.34 billion has been ear marked so far.

The converter boxes that can make analog TV sets digital ready can cost up between $40 and $80. But a government-issued $40 coupon (limit of two for each household) can subsidize almost all or most of the cost.

NTIA expects to receive about 60 million coupon requests by March 31, 2009. However, the current level of funding can support only about 50.5 million coupons.

When funding runs out, the program will hold out on issuing further coupons, says the agency. “NTIA realizes that this would likely result in consumer confusion and dissatisfaction with the program,” it said in a letter to Congressman Markey.

There are an estimated 300 million TVs in the U.S., of which about 70 million use antennas and require a converter box to switch to DTV. Till date, nearly 43 million converter box coupons have been distributed.

Eye-rolling concern from Barack Obama’s compassion police, who consider it an apocalpytic hardship to go without subsidized TV:

President-elect Barack Obama is urging Congress to postpone the Feb. 17 switch from analog to digital television broadcasting, arguing that too many Americans who rely on analog TV sets to pick up over-the-air channels won’t be ready.

In a letter to key lawmakers Thursday, Obama transition team co-chair John Podesta said the digital transition needs to be delayed largely because the Commerce Department has run out of money for coupons to subsidize digital TV converter boxes for consumers. People who don’t have cable or satellite service or a new TV with a digital tuner will need the converter boxes to keep their older analog sets working.

Obama officials are also concerned that the government is not doing enough to help Americans — particularly those in rural, poor or minority communities — prepare for and navigate the transition.

“With coupons unavailable, support and education insufficient, and the most vulnerable Americans exposed, I urge you to consider a change to the legislatively mandated analog cutoff date,” Podesta wrote.

In 2005, Congress required that broadcasters switch from analog to digital broadcasts, which are more efficient, to free up valuable chunks of wireless spectrum. The newly available room in the airwaves can be used for commercial wireless services and for emergency-response networks.

Because Congress set the Feb. 17 date for the change, it would have to pass a new law to postpone it. Podesta’s letter went to the top Democrats and Republicans on the Senate and House Commerce committees.

Obama’s request for a delay is a victory for Consumers Union, which had asked for a postponement of the digital TV shift.

“We are extremely pleased the incoming administration is supportive of consumer efforts to ensure that the poor, elderly and rural consumers do not face economic hardship as we move broadcasting to digital transmission,” said Gene Kimmelman, the group’s vice president for federal policy.